AmEx and Wal-Mart’s ‘Bluebird’ Takes Flight

By Avi Salzman

American Express (AXP) announced today it will team up with Wal-Mart (WMT) to offer prepaid cards. The companies are responding to consumers who are tired of paying fees on credit and debit cards — the new card won’t have minimum balance requirements and overdraft fees, although it will charge fees for services like out-of-network ATM use. People can put m0ney on the cards using direct deposit, using cash at a Wal-Mart register, or by linking their checking or savings accounts, among other options. The cards will be available in more than 4,000 Wal-Mart stores, the companies said in a release.

For AmEx, which has benefited for decades from its relatively affluent customer base, the partnership marks a strategy shift, and a shift in tone:

“Bluebird is our solution to help consumers who currently may be poorly served by traditional banking products. It allows them to easily and safely move, manage, and spend their money. In an era where it is increasingly ‘expensive to be poor,’ we have worked with Walmart to create a financial services product that rights many of the wrongs that plague the market today,” said Dan Schulman, group president, Enterprise Growth, American Express.

Wal-Mart already offers prepaid cards through Green Dot (GDOT), which is feeling the pressure this morning. GDOT shares are down about 20%. Given the abysmal rates most banks now pay to savers, the partnership could also challenge banks with big branch networks.

AmEx and Wal-Mart shares were trading flat in morning trading, but Green Dot was down 19%.

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